Friday, December 18, 2009

Weekly Indicators

- by New Deal democrat

Virtually all of the monthly and weekly data points reported this week indicated continued economic expansion. Both the PPI and CPI explicitly turned from YoY deflation to inflation, showing pricing power. Housing permits and starts rebounded strongly from last month's surprise decline (probably a one-off result of an anticipated ending of the $8000 housing credit). Industrial production and capacity utilization rose strongly, while the New York and Philly Fed regional reports for December were contradictory, one nearly tipping into contraction and the other showing expansion at an increasing rate. November Leading Indicators were reported at +0.9, indicating economic growth will probably continue right through the first quarter of next year.

Turning to the high-frequency weekly data:Weekly sales at retail chains rebounded slightly, rising 0.4% [pdf] for the week ending December 12, 2009, and 2.4% on a YoY basis.

Shoppertrak likewise said sales rose 1.1% on a YoY basis, and 18.2% percent from the previous week, completely erasing that post-Black Friday downturn.

The BLS reported that initial jobless claims were up 7000 last week to 480,000, but the 4 week moving average continued to decline.

Gasoline usage last week remained steady at a rate slightly above last year's, while the average cost of a gallon of gas dropped out of its 8 week range, to $1.59.

Halfway through the month, on the 16th the Daily Treasury Statement showed $79.8B paid in withholding taxes, compared with $84.2B on the same day last year, indicating that the distress of state and local governments in particular is intensifying and has not yet started to reverse.

Finally, the Railfax report for last week showed that cyclical traffic was almost exactly that of a year ago. Intermodal traffic is not far behind. The only types of cargo not greater than their shipments a year ago are coal and forest products. All divisions of traffic have finally begun their seasonal decline, but cyclical traffic in particular has been quite steady over the last three months, a continuing good sign. Last week a representative of Railfax commented here that "We break the data into three distinct categories that should be viewed independently. Then the data can be used as a proxy for the manufacturing economy (cyclical), imports (intermodal) and electrical production (baseline). And you can always call us with your questions."

In summary, this week showed a continuing substantial economic expansion, with slightly easing weakness in the labor market.